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Today in the Market (2/29/2024)

Good Morning! On Thursday, the S&P 500 and Nasdaq had their best February in over ten years as investors analyzed an important inflation report, leading to a rally in U.S. equities.

So how did all three indexes end on Leap Day? The S&P 500 and Nasdaq increased by 0.52% & 0.90%, respectively, while the Dow Jones rose by 0.12%.

SUDDEN CHANGE

After software firm Snowflake Inc. (SNOW) announced the resignation of CEO Frank Slootman and presented a dismal sales outlook, the stock saw its steepest fall ever (shares fell 18%, marking the worst drop since the firm’s 2020 IPO).

But why were investors so upset? Snowflake announced its fiscal 2024 fourth-quarter results, and the company’s sales and profits were much better than expected. However, other news took center stage, obscuring the sales and profit beats. This was the announcement of Frank Slootman’s resignation from his position as CEO, and the combination of management’s forward guidance was disappointing.

Why could this be a bad thing for Snowflake? Investors were surprised by the management turnover. Unexpected CEO transitions might indicate internal issues or significant strategic shifts inside a corporation. It is uncertain if this is true for Snowflake, but Wall Street is dissatisfied with the sudden change of leadership.

KEEP THE BREAD OUT OF IT

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According to Bloomberg, California Gov. Gavin Newsom may have pushed for Panera Bread to receive an exemption from California’s new $20 minimum wage law because of his longtime friendship with and financial support from fast-food owner Greg Flynn.

Let’s back up, though. Newsom approved a law last year to increase the minimum wage for fast-food workers in the state from $16 to $20 per hour, effective this April. However, there was one puzzling exception: fast-food businesses that provide bread as an independent purchase, such as Panera.

However… industry analysts suggest that Panera Bread would likely need to raise salaries to remain competitive with other restaurants that are providing more pay to employees. Also, Flynn’s Panera Bread retail locations recently advertised employment opportunities at a wage of $20 per hour.

 

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